Chickens in North Carolina Can No Longer Afford to Eat Corn
by David Sassoon - Mar 19th, 2008
The price of corn reached a record $5.795 a bushel last week in Chicago as a result of U.S. mandates promoting ethanol production. That has pushed the price of feed for its chickens too high for Pilgrim's Pride Corp., the world's biggest poultry processor, which announced last week it would close a chicken plant in Siler City, North Carolina as a result.
The company is also going to close six of the company's 13 U.S. distribution centers in Oskaloosa, Iowa; Plant City and Pompano Beach, Florida; Jackson, Mississippi; Nashville, Tennessee; and Cincinnati.
In announcing the closings and the loss of 1300 jobs, the company blamed U.S. ethanol policies for pushing the industry into crisis. Feed represents about half the cost of raising a bird.
``Our company and industry are struggling to cope with unprecedented increases in feed-ingredient costs this year due largely to the U.S. government's ill-advised policy of providing generous federal subsidies to corn-based ethanol blenders,'' Chief Executive Officer J. Clint Rivers said in the statement.
The price of soybean meal in Chicago rose to $392.90 per 2,000 pounds, the highest since 1973, on March 3 and has gained more than 50 percent in the past year.
``Based on current commodity futures markets, our company's total costs for corn and soybean meal to feed our flocks in fiscal 2008 would be more than $1.3 billion higher than what they were two years ago,'' Rivers said.
For consumers, retail prices for broiler products is up 10% over the last year.
For a company whose revenue in 2007 was $7.6 billion, a rise in costs of $1.3 billion ain't chicken feed.
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It's not that clean cut
While I feel for businesses being shuttered, corn is a tremendously problematic crop, in the US at least. Heavily subsidized, way over produced, and turned into unhealthy sweeteners, and now ethanol, the focus on and dependence upon cheap commodity grains has got to be shifted. See King Korn and it will be made perfectly clear what's going on here.
Paul Smith
Greensmith Consulting
www.greensmithconsulting.com
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- JAMES
NorthCarolinaDrugTreatment
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